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SBJ/April 1-7, 2013/Marketing and SponsorshipPrint All
Spire Capital Partners is shopping its majority stake in Indianapolis-based Just Marketing International, the motorsports agency that works across Formula One, NASCAR and IndyCar.
The private equity group, which bought 50 percent of the agency five years ago, hired Rothschild Group to put together a sales book and approach potential buyers. The other owners of Just Marketing International include Credit Suisse, which owns 10 percent; WPP, which owns 20 percent; and the agency’s founder and CEO, Zak Brown, who owns 20 percent. Those owners have the option to retain their respective stakes in the agency or sell their positions along with Spire.
Said Brown, “Spire has been a fantastic partner for our business and delivered a ton of value. It’s natural for a private equity company to sell its interest in a business after a few years. For us, it’s business as usual, and we’re excited about the future.”
JMI was founded in 1995 in Indianapolis. It employs more than 100 people across offices in Indianapolis, London and Hong Kong.
The sales effort comes five years after Spire bought its majority stake in JMI. It also comes at a time when the national merger and acquisition market has improved from recent years, as evidenced by rival bids to acquire computer maker Dell and by Berkshire Hathaway’s purchase of H.J. Heinz Co. Whether the sports market, specifically, has similarly rebounded is less clear. Phil Anschutz recently pulled his company AEG off the market, and IMG is in the early phases of a sales process that is expected to fetch more than $1.5 billion.
JMI is small compared with both those deals. Sources familiar with Rothschild’s sales book said JMI last year claimed earnings before interest, taxes, depreciation and amortization of $8 million. WPP’s acquisition of 20 percent of the company in 2011 valued it at more than $80 million.
Hernandez said Spire, which also owns the Professional Bull Riders, Velocity Technology Partners and six other companies, is selling JMI because it is winding down its second fund and starting a third. It acquired JMI as part of the second fund and has recently sold other companies it bought with that fund, including heavy equipment auctioneer AssetNation. He added that Spire is testing the market and exploring its options with JMI.
“We could keep it,” Hernandez said. “We could sell our interest. … Maybe you sell a piece of it. It’s not a black-and-white thing.”
Hernandez declined to say when the sales process began.
In recent months, sources said, Rothschild has approached private equity groups and holding companies to gauge their interest, including Omnicom and Interpublic Group.
Hernandez said if another holding company wanted to acquire the agency, WPP would most likely sell its stake.
A WPP spokesman said WPP’s “attitude” toward retaining or selling its stake in JMI “depends on who purchases Spire Capital’s share, if it is sold at all.”
Sources who have reviewed Rothschild’s sales book said it emphasizes the success JMI has had in building its international business, particularly in F1, where it brokered a five-year, $200 million deal for UBS to become a series sponsor in 2010. It also underscores the sales success and relationships Brown has amassed over the years.
But sources familiar with the sales process said Brown is in the last year of his contract at JMI, and recently, his name has popped up for other jobs. Hulman & Co., which owns the IndyCar Series, confirmed it approached him to become the CEO of a new motorsports division, and British papers have put him on a short list to succeed 82-year-old F1 CEO Bernie Ecclestone. He has been considering selling his home in Carmel, Ind., outside JMI’s headquarters in Indianapolis, and moving to London, where JMI’s business has expanded in recent years.
Hernandez declined to discuss the details of Brown’s contract but said Brown was committed to the agency.
“He’s an integral part of the business,” Hernandez said. “Any buyer interested in JMI would be interested in retaining Zak. You can presume Zak will stay with JMI.”
Brown said he remains committed to JMI but declined to comment further on his contract or his future.
Some of MLB’s biggest sponsors are rolling out new activation as the league opens its season this week.
Anheuser-Busch, which is the presenting sponsor of opening week, will support its league rights and its 23 club deals with team-branded cans of Budweiser in those markets and cans bearing MLB’s silhouetted batter elsewhere. A total of 130 million Budweiser 12-ounce cans will carry MLB team or league logos, while outfield signage in about 20 MLB parks will depict the MLB-themed cans.
Budweiser has rolled out an MLB-branded can.
“We’re trying to make Opening Day a bigger occasion,” said Blaise D’Sylva, vice president of media, sports and entertainment marketing at Anheuser-Busch.
Procter & Gamble’s Head & Shoulders brand is activating around a new MLB spokesman. Los Angeles Angels pitcher C.J. Wilson replaces Minnesota’s Joe Maurer in ads from Saatchi & Saatchi, New York, for a new brand extension: Head & Shoulders with Old Spice. An associated marketing initiative has P&G donating $1 to MLB’s Reviving Baseball in Inner Cities program for every strikeout (or, “whiff”) during the season.
Last year, there were more than 36,000 strikeouts across MLB.
Ad buys in some MLB markets include integration for Whiff of the Game and the Season of the Whiff. As a buildup to MLB’s All-Star Game at Citi Field in New York, there will be a Head & Shoulders ad wrap of the No. 7 subway train, which connects midtown Manhattan to Citi Field.
The big news for MLB sponsor Scotts is a baseball program with Wal-Mart, which is trying to upgrade its lawn and garden department to compete with the likes of Home Depot and Lowe’s.
A program called Ultimate Home Field Advantage across all 3,800 U.S. Wal-Mart locations includes Scotts’ MLB-branded point-of-sale displays. Twenty MLB-themed “retail-tainment” events will be part of the program, including batting cages in front of stores. The refurbishment of baseball fields in six markets is also planned, an element tied to Wal-Mart’s sponsorship of the coming Jackie Robinson film, “42.”
Opening Day sees Scotts backing a remote broadcast of the “Mike & Mike In The Morning” ESPN Radio show at the MLB Fan Cave in New York City. A presence also will occur in Cincinnati, which will include Scotts Spring Carpet: a Reds-themed grass and flower display in the city’s Fountain Square.
Early indicators from teams in the country’s top market are encouraging. The domestic auto industry’s recovery has fueled an uptick of seven figures in ad sales at YES Network, said Howard Levinson, senior vice president of ad sales. Last season’s 3.92 average game rating was the first time Yankees ratings averaged below a 4.0 since 2003. However, Levinson said that even after a record sales season for Yankees’ broadcasts in 2012, YES is budgeting for an increase.
At the Mets’ RSN, SportsNet NY, the auto category has helped boost sales 5 percent from a year ago, network President Steve Raab said.
The ESPN-televised Home Run Derby, one of the largest sponsorship assets sold by MLB and one of the biggest sports ratings draws of the summer, was left without a sponsor last year when State Farm exited MLB’s corporate roster after six years. The departure of MLB sales chief Lou Koskovolis in February to lead sales for NBC Sports Group’s Golf Media further complicates a potential deal, even at a time when insurance brands are spending marketing dollars like it is Monopoly money.
State Farm’s name came off the derby after last season. Will another insurer want to follow?
Whether one insurance brand would want to follow another as a Home Run Derby sponsor is an intriguing question. Geico has more than a dozen MLB club deals, including one with the Mets and Citi Field, which will host this year’s derby and All-Star Game.
Without much time to plan marketing activation around such a sizable investment, several sources said, the league was close to awarding the derby to new wireless sponsor T-Mobile. MLB’s executive vice president of business, Tim Brosnan, said, “We’re still talking to a lot of potential sponsors and should have a decision soon.”
Elsewhere on the MLB sponsorship front: As noted here previously, the renewal of Pepsi, an MLB sponsor since 1997, is all but complete. As for bringing in a new MLB sales chief? Brosnan said that job opening is with a search firm and “we’ll take the best candidate.” In terms of history on the position, when current NFL sponsorship chief John Brody left MLB for Wasserman Media Group in August 2010, MLB tabbed Koskovolis, who was at Six Flags, for the post five months later.
> FRISCO FIZZ: Pepsi has signed a 10-year founding partnership deal for soft drink marketing and pouring rights at the San Francisco 49ers’ yet-unnamed new $1.2 billion facility in Santa Clara, which is set to open in 2014. Since Coke is a longtime 49ers team sponsor, the deal is noteworthy for the switch to rival Pepsi, which has a 10-year term at the new stadium matching that of Anheuser-Busch. A-B also displaced an incumbent 49ers sponsor, MillerCoors.
Coke will have one more year with the 49ers at Candlestick Park, but after that the switch will make the tally at NFL venues 15 for Coke, 15 for Pepsi and one for Dr Pepper Snapple (RC Cola in Chicago).
Pepsi becomes the stadium’s seventh partner at the seven-figure founding partner level, along with A-B, NRG, Brocade Communications Systems, SAP, Sony and data storage company Violin Memory.
CAA Sports handled the deal for the 49ers while Genesco Sports Enterprises handled on behalf of Pepsi.
> PURPLE POWER: While we don’t believe it has anything to do with the demand generated by winning, it is noteworthy that the Super Bowl champion Baltimore Ravens are close to completing a deal that would see the team’s e-commerce needs serviced by Fanatics Retail Group. FMI was the incumbent. Baker Koppelman, Ravens vice president of ticket sales and operations, said the team is also bringing its stadium merchandise operations in-house, which was also previously handled by FMI. He added that the decision to switch e-commerce providers was based both on service and Fanatics’ ability to offer a broader range of licensed products. Within the NFL world, Fanatics services NFL.com’s e-commerce site, along with those of the Denver Broncos, Houston Texans, Jacksonville Jaguars, Kansas City Chiefs, Miami Dolphins, New York Giants, Philadelphia Eagles, San Diego Chargers and San Francisco 49ers.
Federer will be foaming up for Gillette for another three years.
Terry Lefton can be reached at email@example.com.
UPS has developed new business-to-business opportunities through its NCAA sponsorship that has it shipping everything from Final Four tickets to the actual court on which the semifinals and final of the men’s basketball tournament will be played this weekend.
With that broadening of its business-to-business relationships, the shipping giant projects its NCAA-related revenue this year will be five times what it was a year ago.
UPS started its NCAA sponsorship in 2010.
Cannon said recent shipping and logistics deals with businesses like Colonnade Group, Turner Events and Populous are central to UPS’s effort to extract new revenue from the NCAA partnership.
UPS already has the shipping business for the NCAA directly — work that includes transporting the playing court to the Georgia Dome from Michigan, where the manufacturer, Connor Sport Court, constructs its courts. The company also has an agreement with WW&L Ticketing, the company that designs and produces the NCAA’s tickets. UPS ships about 30,000 Final Four tickets to purchasers, some as far away as Australia and Japan.
The NCAA sponsorship, which started in 2010, does not guarantee UPS any business with other NCAA partners, but it does open the door for discussions, and many of those talks have led to new business. UPS’s original NCAA deal was for four years at $8 million to $10 million a year. With this being the final year of the deal, renewal talks are under way, the company said.
“Sports and entertainment are relatively new spaces for us, in terms of freight and shipping,” said Hugh Allen, managing director of UPS’s entertainment logistics, a new focus created in the last year within the supply chain solutions division. Allen oversees the NCAA-related shipping for playing courts, concert stages and other events.
“What we’ve found is that a lot of companies didn’t really know our capabilities,” he said. “A big part of leveraging our NCAA deal is showcasing the full suite of our solutions. People see the UPS trucks and the guy in brown delivering packages to the door, but we have evolved into a much more robust, solution-oriented company.”
One big chunk of new business this year comes from the Birmingham, Ala.-based Colonnade Group, which creates the unique seating arrangement around the court for the Final Four. The court for this year’s game will be built on a 3-foot-tall stage in the middle of the football field at the Georgia Dome. Colonnade builds the temporary seating around the court that extends out to the permanent seats.
UPS’s freight arm used close to 50 trucks to move all of the equipment — steel posts, decking, actual seats — needed to build those temporary seats from a warehouse in Birmingham to Atlanta. Some of the seating was to be used this past weekend at the South Regional in Arlington, Texas, before being shipped to Atlanta this week for the Final Four.
In all, roughly 100 trucks and trailers are being used to transport the equipment needed to build infrastructure for the Final Four and other consumer-facing events like concerts and fan fests.
Allen pointed out that there’s a lot of orchestration that goes into that transportation, as well.
“You can’t have the seats arrive before the steel posts,” he said. “You also can’t have a bunch of trucks all show up at the same time. There’s no room for that. Everything has to be staggered to fit a schedule.”
That sounds a lot like the logistics commercials that UPS has been running during the tournament game broadcasts. Florida coach Billy Donovan, former player Lisa Leslie, ESPN analyst Jay Bilas and CBS analyst Greg Anthony are ambassadors for UPS this year. Donovan has been the central figure in UPS’s primary commercial for March Madness.
Visa has reached an eight-year sponsorship extension for the World Cup valued at more than $170 million, allowing it to continue as the official payment services partner for the world’s biggest soccer tournament and its governing body, FIFA, through 2022.
The deal ensures Visa will have the rights to the two premiere global sports properties — the Olympics and World Cup — for the rest of the decade. Over the last six years, it has used both properties to raise its brand awareness in passionate Olympic markets such as China and Japan, and passionate soccer markets such as South America and Africa. It will be able to continue to do that now through at least 2020, when its sponsorship with the International Olympic Committee ends, and 2022, when its FIFA deal ends.
Visa’s name has been linked to the World Cup since the brand became a FIFA sponsor in 2007.
Visa has placed more emphasis on soccer in recent years. The company was aggressive in securing its first World Cup sponsorship, which took effect in 2007, outmaneuvering longtime FIFA sponsor MasterCard to become the official payment services sponsor of the 2010 and 2014 World Cups. That deal, which was valued at $170 million, wound up in court when MasterCard, which sponsored FIFA from 1990 to 2006, sued FIFA, claiming it had a right of first refusal for the category and charging that FIFA violated that agreement. The parties ultimately settled the lawsuit.
Sources familiar with the terms of Visa’s extension said FIFA clawed back some of the rights that Visa has in its current deal. That existing deal, which runs through 2014, gives Visa the rights to both the payment services category and the retail banking category. The company has been able to take the retail banking rights and sell them in many markets around the world, recouping some of its sponsorship cost by auctioning those rights in targeted countries, such as in Japan, to Japan Post Bank. FIFA retained the local retail banking rights for the two countries hosting the World Cup during the span of the deal: South Africa in 2010, and Brazil in 2014.
“It was a really innovative deal,” said Tom Shepard, a former Visa sponsorship executive and current partner at sports marketing agency 21 Marketing, whose client roster includes Ernst & Young and Liberty Mutual. “Visa could have been far more aggressive in liquidating its rights outside the host country.”
But under terms of Visa’s extension, which covers the 2018 World Cup in Russia and the 2022 World Cup in Qatar, FIFA will keep control of the retail banking rights. Visa’s rights will be limited to the payment services category. That change gives FIFA the chance to boost its total haul from the retail banking category by selling rights in Europe during the coming World Cups.
The change also means Visa will be spending more for less and will not be able to offset its costs in the same way it has under its current agreement. It’s unclear whether Visa will be able to pass through, but not sell, rights to use the World Cup and FIFA logos to banks worldwide. It does that with its worldwide IOC sponsorship.
Visa’s business has changed considerably since it signed its current deal and became one of FIFA’s six worldwide sponsors. When that deal was struck, Visa was still owned by member banks. Today, it is a public company operating in more than 70 markets around the world, and it reportedly is considering a more than $3 billion acquisition of its sister company, Visa Europe, that would bring more than 25 additional countries.
Its approach to sports marketing evolved as its structure changed. When it was owned by member banks, its sports marketing was split between a U.S. sports marketing group (led by Michael Lynch) and a global group (led by Shepard). Now it has a single group, and its approach to both the Olympics and the World Cup has shifted from developing independent marketing programs in countries around the world to developing a central marketing platform and tag line that’s adopted by more than 70 territories.
FIFA divides its sponsorships into three tiers: worldwide partners, World Cup sponsors and national supporters. In addition to Visa, the organization’s other worldwide partners are Kia, Adidas, Coca-Cola, Sony and Emirates.
Though Visa snatched the World Cup rights from MasterCard, its biggest competitor has tried to retain a stake in soccer worldwide. MasterCard last year signed a sponsorship with the Brazilian national team that will run through 2020. The deal gives MasterCard worldwide rights to a squad that is known for stylish play and considered by soccer fans worldwide to be their second favorite team, behind only their own national team.